PI run-off cover is often required by engineering contracts for a period after the project is completed.
This is commonly referred to as a run-off requirement.
A contract may specify:
- how many years PI cover must be maintained
- the minimum limit required
- the type of policy required
- whether evidence of insurance must be provided each year
Engineers should check whether the requirement is realistic before agreeing to it.
Future insurance availability, premiums and policy terms cannot always be guaranteed, particularly over long periods.
The contractual requirement should also be considered alongside any registration or statutory requirements that may apply to the engineer.
If a contract requires an unusually long period of PI cover, it is worth reviewing that obligation before the agreement is signed.
